news REDFIELD (AP) -- Farmers in the Dakotas who lost millions of dollars to a failed seed company will get their chance Saturday to speak on proposed changes to South Dakota law designed to help regulators better detect a grain buyer's deteriorating financial condition.
Jim Mehlhaff, grain warehouse director...
Mitchell, 57301

Mitchell South Dakota 120 South Lawler 57301

2013-07-31 17:40:41

REDFIELD (AP) -- Farmers in the Dakotas who lost millions of dollars to a failed seed company will get their chance Saturday to speak on proposed changes to South Dakota law designed to help regulators better detect a grain buyer's deteriorating financial condition.

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Jim Mehlhaff, grain warehouse director for the South Dakota Public Utilities Commission, said the proposed changes focus on timely disclosure of financial information, modest increases to the bonding requirements and criminal penalties for grain buyers that fail to comply.

The company shut down earlier this year without paying farmers for millions of dollars in sunflower seeds that had been delivered to its warehouse. Its assets have since been bought by a Canadian company.

Some farmers have criticized the PUC for failing to adequately regulate the company.

PUC chairman Chris Nelson, who recently won re-election to the board, led a review committee to suggest proposed changes in the law.

Nelson campaigned on strengthening disclosure laws rather than creating a large bond fund. He contends that a system in which farmers pay a few cents per bushel to create a fund, as in North Dakota, would take money out of producers' pockets without reducing the chance of a company going bankrupt.

A main point of contention is the bonding requirement. Anderson Seed, a company that could purchase up to $10 million worth of grain, was required to have only a $100,000 surety bond to pay producers.

"The bond is a joke," said Orient farmer Ray Martinmaas. "I have said it before, increasing a bond by $50,000 won't do anything. Who wouldn't throw away $150,000 to get $10 million."

Martinmaas, who lost $47,000 when Anderson Seed failed, said although the bond amount is pennies on the dollar for the amount of money lost, he said he's entitled to his share.